Snapshot: Brazil’s latest energy policy decisions

Brazil’s national energy policy council (CNPE) published a series of decisions with potential impacts for the oil and gas and electric power sectors. 

However, CNPE delayed until January a decision on the approval of the Angra 3 nuclear power plant's rate modeling, an essential factor for the conclusion of construction, which has been dragging on since the 1980s.  

The postponement of the Angra 3 decision was reported to BNamericas by nuclear industry association Abdan.

CNPE approved the inclusion of the Cerussita, Aragonita, Rodocrosita, Malaquita, Opala, Quartzo and Calcedônia exploration blocks for bidding under the production sharing regime in watchdog ANP’s open acreage program. 

The revenues from signature bonuses estimated by the government for these blocks are in the order of 874mn reais (US$144mn). 

The seven blocks are located in the pre-salt polygon, in the Santos basin off the states of São Paulo and Rio de Janeiro. They join the 17 other blocks authorized by CNPE: Citrino, Larimar, Ônix, Itaimbezinho, Jaspe, Safira Oeste, Safira Leste, Amazonita, Ágata, Mogno, Ametista, Esmeralda, Jade, Turmalina, Rubi, Granada and Cruzeiro do Sul. 

As a result, the next auction, scheduled for June, should be the largest under the production sharing regime in terms of the number of blocks. 

Local content

CNPE also approved a resolution establishing minimum local content rates for the construction of new tankers in Brazil. 

According to the resolution, new tankers must have a minimum overall local content rate of 50%, which includes goods produced and services provided in Brazil during the construction contract. 

The percentage covers engineering services, machinery and equipment, as well as the construction and assembly of the vessels.

Renovabio

Another resolution approved by the government agency sets out the compulsory targets for reducing greenhouse gas emissions for the sale of fuels for the period from 2025 to 2034 through the Renovabio national biofuel policy. 

The global target is to achieve an 11.37% reduction in carbon intensity in 2034 compared to 2018.

According to the measure, RenovaBio's target for 2025 will be 40.39mn decarbonization credits (CBIOs), which means a reduction of 40.39Mt of carbon dioxide equivalent in the atmosphere.

CBIOs are environmental assets issued by biofuel producers in an amount proportional to the efficiency score of their certified production and the volume of biofuel sold. One CBIO is equivalent to one tonne of greenhouse gases not emitted into the atmosphere due to the use of biofuel to replace fossil fuels. 

They are traded by biofuel producers on Brazil’s B3 stock exchange to be purchased by distributors to meet their individual targets or by third parties interested in the trade. 

Waste oil and fat 

A resolution was also approved that establishes that it is in the interest of the national energy policy to set minimum targets for the use of waste oils and fats in the production of biodiesel, sustainable aviation fuel (SAF) and green diesel.

The measure is in line with the recently sanctioned Fuel for the Future (Combustível do Futuro) law, which aims to promote sustainable mobility by encouraging the production and use of low-carbon fuels.

The targets will be defined at a later date by means of an ordinance issued by the mines and energy ministry (MME) in conjunction with the environment and climate change ministry (MMA) following the preparation of a regulatory impact analysis.

New committee

CNPE also approved the creation of the permanent technical committee on the Fuel for the Future program. 

The measure aims to bring agility, transparency and legitimacy to the work needed to propose the regulation of various provisions contained in the Fuel for the Future law.

The new law creates national programs for green diesel, sustainable aviation fuel and biomethane, as well as increasing the mixture of ethanol and biodiesel in gasoline and diesel, respectively. 

It also establishes the regulatory framework for carbon capture and storage and unlocks resources totaling 1tn reais (US$165bn) over the next 10 years, creating opportunities that combine economic development with job creation and respect for the environment, according to the entity.